The government of Pakistan has introduced procedure for pension calculations, implementing new conditions and limitations that will impact retirees and future pensioners.
The changes, outlined in an official notification issued on Wednesday, aim to streamline the pension system and ensure equitable distribution of pension benefits.
Under the revised procedure, pension will now be determined based on the average salary of the last 24 months of service rather than the final salary at retirement. This adjustment is expected to create a more balanced pension structure while preventing sudden spikes in pension payouts due to last-minute salary increases. Additionally, employees will no longer be permitted to receive multiple pensions, ensuring a fairer distribution of pension resources among beneficiaries.
According to the procedure, these pension calculations will not apply to employees opting for voluntary retirement. Furthermore, any incremental raises received in the final year of service will be excluded from the average salary calculation for pension purposes. This procedure is intended to prevent artificial salary inflation aimed at increasing pension amounts.
In a significant move, the government has also introduced modifications to the pension increment mechanism for existing pensioners. Family pensions, which are provided to dependents of deceased retirees, will now be calculated based on net pension values rather than gross figures. This change ensures a standardized approach to pension disbursement, aligning family pensions with actual take-home pension amounts.
Additional clarifications provided in the notification include:
• Any days worked in the month of retirement will be counted as a full month for pension calculations.
• Incremental salary raises received in the final year will not be considered in pension calculations.
• Family pensions will now be calculated based on net pension values, improving transparency and fairness in pension distribution.
These revisions in pension policies reflect the government’s commitment to fiscal responsibility and sustainability in pension financing. While the new rules may affect some retirees’ pension expectations, they are designed to create a more equitable pension system that benefits a broader range of pensioners. Government officials have assured that existing pensioners will continue receiving their pension under previously established terms, with only future calculations being affected by the latest changes.
As pension regulations continue to evolve, employees and retirees are encouraged to stay informed about updates to ensure they understand the impact of these changes on their pension benefits.